The Securities and Exchange Commission obtained final judgments against Safeguard Metals and its principal, Jeffrey Ikahn. The SEC charged Safeguard and Ikahn with acting as unregistered investment advisers by persuading investors to sell their existing securities, transfer the proceeds into self-directed Individual Retirement Accounts, and invest the proceeds into gold and silver coins provided by Safeguard Metals.
The judgments point out that the anti-fraud provisions of Section 206 of the Investment Advisers Act apply to all investment advisers, whether they are registered or not. (Or whether they intend to be investment advisers or not.) The judgments found violations of Section 206(1) and 206(2) by “making use of the mails or any means or instrumentality of interstate commerce, in connection with the conduct of business as an investment adviser, directly or indirectly: (i) to employ any device, scheme or artifice to defraud any investment advisory clients or prospective clients; or (ii) to engage in any transaction, practice or course of business which operates as a fraud or deceit upon any such investment advisory clients or prospective clients.”
Safeguard Metals, like nearly all gold and silver pushers, play on the uncertainty in the markets. It plays up the chance of recession, financial collapse, and assets freezes. Gold and silver will protect them from financial ruin. At least, that’s the story.
The big scam is the commission and mark-ups charged to those they lure in to the plan. The sales agents would say a 1% commission, when it was 8%-10%. The account agreement provide for a mark-up of between 4% and 23% depending on the type of product.
Sources: